"Their balance sheet right now, they're holding on," she said. "Certainaly seems like there's a lot of change happening, and it's not working that great yet, but at least the wheels are in motion."

On CNBC's "Fast Money," Telsey said that J.C. Penney might have nowhere to go but up.

"You have seen a bottoming in general, I think," she said. "Look at Penney's, where the comps were less worse. We're hearing a lot of people and companies talk about August picking up."

Specifically, JCP was tapering its bad news.

"Comps are less negative," Telsey said. "They were down 11.9 percent when they've been down in the 20s and in the 30s. So, the fact that the comps are less negative, the traffic declines are less negative, that's what you've seen."

Karen Finerman of Metropolitan Capital Advisors said that she was "short a little bit and long puts."

"I don't like the story here," she said. "There was nothing good to me in this earnings here, except it could've been worse."

There were better areas to put money to work, Brian Kelly of Brian Kelly Capital said.

"Of all the stocks out there to invest in, why are you in J.C. Penney? If I'm buying a stock, I want to buy a stock that has some hidden value, that people haven't found the story out yet," he said. "The best you can say about this is things aren't so bad, and they're going back to an old model that wasn't so great anyway.

"Could you get a short squeeze here? Is it good or a trade? Potentially, but I've got way more things to buy here."

— CNBC's Stephanie Landsman contributed research to this report. Follow her on Twitter: @StephLandsman. CNBC's Torrey Kleinman contributed research to this report.

Trader disclosure: On Aug. 20, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Steve Grasso is funds long GM; Steve Grasso is long BA; Steve Grasso is long BAC; Steve Grasso is long BBRY; Steve Grasso is long GDX; Steve Grasso is long GOOG; Steve Grasso is long HERO; Steve Grasso is long HPQ; Steve Grasso is long MHY; Steve Grasso is long LNG; Steve Grasso is long MJNA; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long QCOM; Steve Grasso is long S; Steve Grasso is long ASTM; Steve Grasso is long POT; Steve Grasso is long DECK; Steve Grasso is long DHI; Paul Hickey is long AAPL; Paul Hickey is long BAC; Paul Hickey is long INTC; Paul Hickey is long NFLX; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long C; Karen Finerman is long JPM; Karen Finerman is long TGT; Karen Finerman is long GOOG; Karen Finerman is long M; Karen Finerman is long JCP; Brian Kelly is short US dollar; Brian Kelly is short Nikkei; Brian Kelly is long T-Notes Futures; Brian Kelly is long Canadian Dollar.